NOTES

Lesson 1: The Foundation of Your Foundation Lesson 3: Candlesticks - Shedding Light on

a. Why Trade? The old buy and hold style of
trading which made the inexperienced look like
trading "experts" up until the advent of the
global crisis in 2008 aren`t working now, as
many who bought and sat on bank shares
would now agree. CFD`s offer the trader the
opportunity to go short as well as long. With
the current state of the global markets, there
are a huge amount of both buying and selling
opportunities that are discussed.
Opportunities
Technical Analysis is all about seeing,
accepting and trading. This is trading what is in
front of you not what you or a pundit predicts.
An introduction to price action, reading
candlestick charts, dojis, engulfing pattern
formations and counter retail trading are
covered in this valuable lesson.

b. What to Trade? Here we look at tradable Lesson 4: Technical Charting 101

instruments (forex, commodities, indices, The previous lesson is expanded to develop
individual stocks) and examine each technical channel and trend trading techniques
individually to explain unique characteristics highlighting breakouts, support and resistance,
and interdependencies. with counter retail strategic entry and exit
c. Who Else is Trading? In almost all other techniques for each trade made.
areas of business and trade, participants like
to have an understanding of who the other
participants are. In trading most traders don`t Lesson 5: Building Your Trading Toolkit
consider and don`t know who else is trading
Building on the previous technical lessons this
and who the most dominant parties are. With
session focuses on descending/ascending
this in mind new traders learn how to swim
triangles, volatile measuring indicators,
with the tide and avoid trading against the
oscillators and Fibonacci retracements with a
market movers.
particular emphasis on counter-retail trading
techniques that both avoid making and exploit
the mistakes that typical retail traders make -
Lesson 2: The Mechanics of Trading all very much opportunity focussed.
What is leverage? What are the benefits and
risks associated with it? Here we will have a
frank examination of leverage, how it makes Lesson 6: Becoming a Counter Retail Trader
the markets accessible to most and how to use
This lesson brings together all of the previous
it to our advantage. This is an area often
Technical Analysis lessons focussing on some
overlooked and is especially important in times
very straightforward methods of finding
of high global market volatility. In short, without
Counter Retail Trading Opportunities - our
leverage most typical traders would not be
speciality. Some of the methods include an
able to physically trade. Whilst leverage gives
examination of moving averages, cross -overs,
individuals the opportunity to profit by giving
simple, exponential and correct order MAs - all
them access to financial trading, it is also has
focussed on attempting to find that
an ever present risk. Inexperienced traders
confirmation to trade that we need. This lesson
need to understand how to get leverage to
is always one of the best received and is not to
work for them. All of the unnecessary jargon is
be missed.
also simplified and clear demonstrations are
provided to work out trade sizes and individual
trade risk relevant to markets being traded.
Lesson 7: Practicalities of Real World Trading

There is no room for emotion or surprises in

trading. Any trade entry or exit is pre-planned
and logged in your trader`s journal. The
reason you entered or exited a trade needs to
have been planned in advance. If you make
some winning trades and don`t know why,
your capital is at risk! Real life explanations
and examples of the difficulties which real
traders face each day are discussed. Practical
steps are illustrated to reduce the
psychological difficulties faced by real traders.
This is best done through an understanding of
why these issues arose in the first place. With
emotions in check, every profitable trader
needs numeric trading targets and goals with a
realistic plan that fits their lifestyle. Good and
bad results are all part of the plan and if
constructed correctly there should be no such
thing as a bad trade.

Lesson 8: Risk Management - Protecting Your

Capital

Trading like all other forms of investing carries

risk. It is through that very risk that profits may
flow. An understanding of the interconnected
and inseparable nature of risk and return is
fundamental to profitable trading. Here we will
introduce traders to the concepts of risk
management so they can minimise their losing
trades and maximise their winners in a
premeditated format.
FOUR KEY FACTS ABOUT TRADING THAT YOU MIGHT NOT BE AWARE OF:

Trading does not require a large amount of capital. The first key fact that many
people who we speak to don’t know or are unsure about when it comes to trading is
that they do not require a huge capital base in order to trade.

While it is true that some securities such as gold or oil may appear expensive to
trade, the creation of leverage in financial trading has helped to facilitate access to
these securities using small levels of capital.

Financial contracts like Futures or Contracts for Difference (CFDs) provide us with
the opportunity to trade the financial markets with only a small capital base. This is
because they are leveraged contracts. Leverage is the ‘risk factor’ that allows us to
marginalise our trade size so that we may create larger purchasing power relative to
the trading capital we have. Leverage can effectively be viewed as a multiplier; we
are able to access these markets as we can trade with larger levels of capital without
owning that capital amount itself. For example if we were to have a capital base of
$1,000 and wished to trade crude oil then the number of barrels of crude oil we can
trade is determined by the price per barrel and our account size. If the price of crude
oil is $50 per barrel, then we can trade 20 barrels of oil. However in the presence of
leverage we can take a larger position. If we had leverage of 10:1 this means that we
can effectively buy 200 barrels of oil with our $1,000 capital base.

One key element to trading with leverage that is highly beneficial to the diversified
trader is the ability to deleverage. The best example is to consider a government
bond. In the real world, the principal cost of investing in a German government 10
year bond is €100,000. This bond also has a price in relation to yield, which moves
each and every day according to market sentiment.

By trading in the CFD market we can actively trade the price of this government
bond, again without owning the asset itself. This ability to de-leverage also provides
us with access to trading equity indices and the publicly traded equities However,
leveraged trades do assume more risk and must be managed well with effective risk
management practice. If you leverage a trade and the market moves against you,
you are liable to sustain a greater loss than a trade with little or no leverage. This
brings us to our next key fact.
 The most important factor is to trade successfully.

Whilst many people believe that the most important factor to trade successfully is
determining what security to trade or at what price to take a trade this is not correct.

The most important factor is to be able to trade successfully and to do so

consistently. Risk management in trading can be segregated into multiple
components, however to become a successful trader you must have a complete and
comprehensive risk management system.

For anyone who has traded before they will understand just how important risk
management is, especially if they were successful in their trading endeavours. If you
were to ask the most successful traders why they are so confident in their trading
ability, they would not tell you it is because they know their trade will be profitable,
they would tell you it is because they know that their capital will not diminish to a
level that they will have to worry should a trade go against them. We will cover risk
management in much more detail later in the course.

Where you are in the world, doesn’t matter.

Another key fact is that many people who are interested in trading or who have just
started trading do not know that it is possible to trade securities from various regions
around the globe.

Trading is no longer local, it is global. No matter where we are in the world we can
trade markets in other regions. This means that if we live in the UK we are not
restricted to trading UK markets. Similarly; if we live in the US or any other country in
the world, we are not restricted to trading only that markets. This provide us with two
important opportunities. Firstly, as we are now able to access markets from different
regions we can effectively reduce the risks involved in trading. If the markets in one
region are not performing well or if they are flat, we can simply trade the markets in
another region. The second opportunity that this provides us, is that we no longer
have the same time restrictions to trade.

If you were not aware that you were able to access financial markets from across the
globe then you may have created a barrier to trading which did not actually exist. In
reality as you can access various markets there are no significant time limits that will
prevent you from trading. Whether you only have time to trade at dawn in New York
or dusk in Tokyo, there will be a market you can access.
 Learning to trade can be easier than people expect.

The vast majority of the people we speak to about trading are always concerned
about the vast quantities of information needed in order to take a trade.

This is another barrier that has prevented individuals from trading the financial
markets, as they are overwhelmed by the sheer number of variables that impact
upon the price of a security. For instance, people believe that if you are trading
Crude Oil you need to know almost every economic world-wide factor that can have
an effect on the price of oil, in order to know whether to take a long or short position
on Crude Oil and at what price. However what people don’t know, is that we are not
required to keep track of all of the various factors that affect the price of a security.
We can successfully trade a security simply by analysing the charts – this method of
security analysis is known as Technical Analysis. Technical analysis is a method for
forecasting the direction the price of a security is likely to take by statistically
analysing the market activity of that security, such as past prices and volume.

A fundamental principle of technical analysis is that a market's price reflects all

relevant information. This means that we do not have to keep track of all of the
variables which affect the price of a security instead we can statistically analyse the
chart of a security in order to determine what position to take on the market and at
the price level at which that position should be taken. This relieves us of the heavy
burden of keeping track of the multitude of variables which affect the price of a
security, as such technical analysis also provides us with a key opportunity. It allows
us to trade various securities from different asset classes, as we are no longer
required to keep track of all the information that affects the security price, we only
need to know how to statistically analyse the charts.